Beyond Portlandia: Subaru Drives For America's Heartland

Subaru, known for its success in Denver, the Pacific Northwest and the Northeast, aims to expand its market to Texas and Tennessee.

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Originally published on January 28, 2013 8:11 am

The car market in the U.S. is at its most competitive. Not only are big companies like General Motors and Toyota slugging it out, but in order to survive, small-niche players like Subaru also are trying to push into the mainstream.

The Japanese carmaker is popular in Denver, the Pacific Northwest and the Northeast. Now Subaru has its sights on Texas and Tennessee.

The comedy show Portlandia pokes fun at all things Portland, Oregon's famously liberal city. In one sketch, two characters, both driving Subarus, meet at a four-way stop. "No, you go," they repeatedly urge each other in an absurd standoff of politeness.

The fact that they're driving Subarus is part of the joke, but that's not some idle stereotype.

Because most Subaru models are all-wheel drive, they're particularly popular in places where the weather can be dicey, like the Northeast or the Pacific Northwest.

An Opportunity In Texas

"If you're No. 4 in Portland and you're No. 20 in Texas, probably the opportunity is in Texas," says Michael McHale with Subaru.

He says the company had to be more ambitious and rethink the U.S. market. "Sometimes we look at the differences around the country. ... But underlying all of that, there are still basic human truths," McHale says.

Not only did the company think about the country differently; it started to sell in a different way by beefing up distribution and dealerships.

Jessica Caldwell, senior analyst and director of pricing and industry analysis at edmunds.com, says Subaru had a strange problem: Its cars were almost too good and its customers were too loyal.

"I think they have a core, loyal following and you would never want to get rid of that ... but at the same time, they keep their cars for a long time and you can't have people keeping their cars for a decade or more when you want to sell new cars," she says.

Success In A Conventional Look

Caldwell says the company tried to expand sales to the middle of the country by making its cars wider, rounder, less boxy, more conventional looking and more fuel efficient.

It worked.

During the economic downturn, when other car companies' sales were declining, Subaru's increased by a third and it began building more of its cars in the U.S.

It's one of the fastest growing car companies, with its biggest growth markets in Houston, Dallas and Florida.

Jake Fisher, director of auto testing at Consumer Reports, says Subaru can serve as an example for other carmakers looking to grow. "They've kind of taken this slow, systematic approach and just really concentrated on what they needed to do to be competitive in the market," he says.

Subaru has solidified its place in the American market, but Fisher says it'll probably never be as big as Toyota or Ford.

"I don't think they have to be a Toyota; they don't have to be everyone else. They don't have to be everything to everyone; they have to be something to someone," he says.

Subaru's McHale says, "If you're buying a big truck in Texas, keep buying the truck — we're not the brand for you. But if you're looking for an all-wheel-drive vehicle that you can throw the dog in the back, the skis on the roof and go in the mountains on the weekend, I think they have some nice hills in Tennessee, too."

McHale says Subaru has conquered Portland, Ore., and Portland, Maine, and now it's on to the Portlands in Texas, Michigan and Tennessee.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

RENEE MONTAGNE, HOST:

Competition has heated up in the U.S. car market. Not only are the big companies like General Motors and Toyota slugging it out, but small niche players are making the push into the mainstream as well. One of those small companies is Subaru. Subaru vehicles are already popular in several regions of the U.S. - Colorado, the Pacific Northwest and the Northeast. Now it's got its sights set on the South, as NPR's Sonari Glinton reports.

SONARI GLINTON, BYLINE: Here's one of my favorite TV bits. It's from the relatively new, very silly show "Portlandia." Two characters met at an intersection in Portland, Oregon; both are driving Subarus.

(SOUNDBITE OF TV SHOW, "PORTLANDIA")

UNIDENTIFIED WOMAN: No, no, no, go ahead.

UNIDENTIFIED MAN: Drive.

UNIDENTIFIED WOMAN: You go.

UNIDENTIFIED MAN: No, no, no, no, no, no, no, no. You first.

UNIDENTIFIED WOMAN: You go.

UNIDENTIFIED MAN: I'm going to go after you.

UNIDENTIFIED WOMAN: Hit the road, Jack.

GLINTON: The show makes fun of all things Portland and the fact that they're driving Subarus, that's a part of the joke. Here's the thing. That's not some idle stereotype. Since most Subarus are all wheel drive, they're particularly popular in places where the weather can be dicey, like the Pacific Northwest or the Northeast.

MICHAEL MCHALE: If you're number four in Portland and you're number 20 in Texas, probably the opportunity is in Texas.

GLINTON: Michael McHale is with Subaru. He says the company had to be more ambitious and rethink the U.S. market.

MCHALE: So sometimes we look at the differences around the country. We think that Portlandias are different from Tennesseans are different from Floridians. So we see that difference, but underlying all of that, there are still basic human truths. So there are people in Tennessee, I think, like to go fishing. I think there are people in Tennessee that like to go hiking,

GLINTON: Not only did the company think differently about the country, they started to sell in a different way as well - beefing up distribution and dealerships.

Jessica Caldwell is with Edmunds.com. She says the company had a strange problem: Their cars were almost too good and their customers too loyal.

JESSICA CALDWELL: I think they have a core loyal following and you would never want to get rid of that. Again, you know, people that will trade in their car and buy a new one. But at the same time, they keep their cars for a long time and you can't have people keeping their cars for, you know, a decade or more when you want to sell new cars.

GLINTON: Caldwell says the company tried to sell to the middle of the country by making their cars wider, rounder, less boxy, more conventional looking and more fuel efficient. And it worked.

During the economic downturn, when other companies' sales were declining, Subaru sales increased by a third, and it began building more of them in the U.S. It's one of the fastest growing car companies in America, with its biggest growth markets Houston, Dallas and Florida

Jake Fisher is with Consumer Reports. He says Subaru can serve as an example for other car companies looking to grow.

JAKE FISHER: So really they've kind of, you know, taken this kind of slow, systematic approach and just really concentrated on what they needed to do to be competitive in the market.

GLINTON: Fisher says Subaru has solidified its place in the American market, but he says they'll probably never be as big as Toyota or Ford.

FISHER: I don't think they have to be a Toyota. They don't have to be everyone else. They don't have to be everything to everyone; they have to be something to someone.

GLINTON: Again, Subaru's Michael McHale.

MCHALE: If you're buying a big truck in Texas, keep buying the big truck - we're not the brand for you. But if you're looking for an all-wheel-drive vehicle that you can throw the dog in the back, the skis on the roof, and go in the mountains for the weekend, I think they have some nice hills in Tennessee too.

McHale says Subaru has conquered Portland, Oregon and Portland, Maine. Now it's on to Portland, Texas, Portland, Michigan and Portland, Tennessee as well.